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Internal auditing's role in preventing and detecting fraud: An empirical analysis International Journal of Auditing (IF 2.345) Pub Date : 2024-02-05 Annika Bonrath, Marc Eulerich
Internal auditing plays a pivotal role in preventing and detecting fraudulent activities. However, the orientation and role of internal auditing in dealing with fraud risk can vary significantly across different companies. This study examines the relationship between the internal audit function (IAF) and fraud, providing new insights into the current practices of internal auditing. Using a survey dataset
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An examination of auditor hypothesis testing strategies in ‘tone at the top’ evaluations: Evidence of diagnostic knowledge structures International Journal of Auditing (IF 2.345) Pub Date : 2024-01-15 Regan N. Schmidt
This study examines the tests auditors design to assess a client's ‘tone at the top’. By exploiting conceptual differences in the constructs of ethicality and competence, the study investigates auditor knowledge structures by disentangling auditor hypothesis testing strategies. The results of an experiment document that auditors design tests to yield evidence of unethical and competent, rather than
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The determinants of linguistic features in key audit matters: Empirical evidence from Europe International Journal of Auditing (IF 2.345) Pub Date : 2024-01-08 Stephan Küster
This study investigates the determinants and dynamics of the linguistic features of key audit matters (KAMs) in European countries. Using natural language processing algorithms, including FINBERT, I quantify stylistic and content-based text characteristics at the KAM level and find that KAM length, readability, sentiment, quantitative density, specificity, the degree of forward-looking statements,
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Issue Information International Journal of Auditing (IF 2.345) Pub Date : 2024-01-04
No abstract is available for this article.
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The involvement of internal audit in environmental, social, and governance practices and risks: Stakeholders' salience and insights from audit committees and chief executive officers International Journal of Auditing (IF 2.345) Pub Date : 2023-12-15 Romina Rakipi, Giuseppe D'Onza
We conducted 31 interviews with audit committee (AC) members, chief executive officers (CEOs), and chief audit executives (CAEs) to investigate the role of the internal audit function (IAF) in environmental, social, and governance (ESG) processes and related risks. We find that multiple possible combinations of the maturity of companies' ESG practices and CAE's perception of the IAF stakeholders' salience
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Partner narcissism in a private market setting: Consequences for audit reporting decisions and audit pricing International Journal of Auditing (IF 2.345) Pub Date : 2023-12-07 Linde Kerckhofs, Marie-Laure Vandenhaute, Kris Hardies
This study investigates the association between audit engagement partners' narcissism (measured by the size of their signature) and audit reporting decisions and audit pricing in a private market setting. We analysed 133,267 (78,994) firm-year observations from (financially distressed) Belgian firms audited by 795 individual engagement partners from 2008 to 2017. Our results suggest that narcissism
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Drivers for the maturity of integrated governance in organizations—An empirical investigation International Journal of Auditing (IF 2.345) Pub Date : 2023-11-28 Anne d'Arcy, Marc Eulerich
This paper sheds light on the factors driving the maturity levels of integrated governance by analysing survey responses from 148 companies that reported on their efforts to coordinate and align their separated assurance functions. When an organization's assurance functions lack coordination, it can lead to challenges like isolated risk functions, incomplete risk coverage and redundant controls. Integrated
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Enhancing CPA competencies for internal audit roles International Journal of Auditing (IF 2.345) Pub Date : 2023-11-21 Adam Vitalis, J. Efrim Boritz, Laura Simeoni
This paper summarises survey study results identifying knowledge, skills, and attitudes (competencies) for entry-level internal audit professionals that could be used to develop a curriculum for chartered professional accountant (CPA)-bound students to pursue fulfilling careers in internal audit and related management positions under changing competency requirements. We built a survey based on the
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Mandatory disclosure of auditor contracting and financial reporting quality: Initial evidence International Journal of Auditing (IF 2.345) Pub Date : 2023-10-24 Blake D. Bowler, Robert R. Carnes, Hyun Jong Park
Regulation requires US public companies to disclose the pre-approval status of their year-end auditors in their annual proxy statements. Although auditor–client relationships remain at will, the disclosure mandate requires companies to publicly announce their intentions to retain their current auditors. In this paper, we provide initial evidence of the potential implications that these disclosures
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Flexible CPA staffing in non-Big 4 audit firms: Its determinants and implications for audit fees and audit quality International Journal of Auditing (IF 2.345) Pub Date : 2023-10-06 Sehee Kim, Hyungjin Cho, Meeok Cho, Bryan Byung-Hee Lee, Woo-Jong Lee
In this study, we discuss how small audit firms (i.e. non-Big 4 audit firms) address the staffing crunch during the busy season. Using monthly certified public accountant (CPA) employment data from Korea, we find that the number of CPAs in non-Big 4 audit firms peaks before the busy season but drops afterward, suggesting the prevalence of part-time or short-term employment (i.e. flexible staffing)
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Corporate political donations and audit fees: Some evidence from Australian audit pricing International Journal of Auditing (IF 2.345) Pub Date : 2023-09-29 Ferdinand A. Gul, Arifur Khan, Karen Lai, Dessalegn Getie Mihret, Mohammad Badrul Muttakin
We examine whether corporate political donations (CPDs) are associated with audit fees in the Australian setting. Our baseline results based on observations of Australian top 500 non-financial companies show that, on average, firms with CPDs are associated with about 9% lower audit fees than firms without CPDs consistent with the strategic investment or resource dependency view. Using path analysis
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Issue Information International Journal of Auditing (IF 2.345) Pub Date : 2023-10-01
No abstract is available for this article.
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Real-time audit of public agencies: Utility, controversy and lessons for an emerging practice International Journal of Auditing (IF 2.345) Pub Date : 2023-09-19 Yoram Rabin, Roy Peled
Real-time audit is the auditing of actions as they occur and the publishing of findings before the audited action was completed. It is an emerging practice of Supreme Audit Institutions (SAIs) in many countries, and it marks a stark departure from the traditional ‘after-the-fact’ auditing practice. Real-time audits have been widely used in the auditing of COVID-19 relief programmes in many countries
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Compensation and carbon assurance: Evidence from the United Kingdom International Journal of Auditing (IF 2.345) Pub Date : 2023-09-17 Stefan Simic, Le Luo, Rina Datt
This study investigates the influence of compensation on companies' decision to undertake carbon assurance. Using a sample of 1326 firm-year observations from the United Kingdom between 2010 and 2018, this study finds that firms that include corporate sustainability incentive terms in executive compensation packages, firms that have higher director compensation and firms that have been involved in
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Reduced audit quality acts: A review and organizational model International Journal of Auditing (IF 2.345) Pub Date : 2023-08-23 Troy A. Hyatt, Douglas F. Prawitt, Kyle M. Stubbs
With increasing regulatory focus on improving audit quality, research on drivers of audit quality remains important to academics, professionals and regulators. One compelling branch of this research focuses on auditors' intentional actions that reduce audit quality, often referred to in the literature as reduced audit quality acts (RAQAs). This paper provides a review and synthesis of the RAQA literature
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The effects of accounting comparability, income smoothing and engagement partners on audit risk International Journal of Auditing (IF 2.345) Pub Date : 2023-08-15 Yong-Shik Kim, Sang-Hun Park
This study investigates whether accounting comparability, income smoothing and engagement partners affect audit risk perceived by auditors. We find that both accounting comparability and income smoothing reduce perceived audit risk and that the interaction of these two variables incrementally reduces perceived audit risk. We also find that the interaction of accounting comparability and income smoothing
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Where's the risk? Material weakness detection in advance of financial misstatement discovery International Journal of Auditing (IF 2.345) Pub Date : 2023-08-12 Christopher G. Calvin
This study uses material weakness (MW) disclosures to explore whether auditors systematically assign greater risk to specific financial statements and account types. Auditing Standard 2201 mandates auditors adjust their levels of material weakness detection in response to the risk associated with each control being tested. Using a sample of firm years with financial misstatements, I show that auditors
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The two sides of corporate social responsibility and the quality of internal control audit opinions International Journal of Auditing (IF 2.345) Pub Date : 2023-08-03 Belen Blanco, Encarna Guillamón-Saorín, Andrés Guiral
Although corporate social responsibility (CSR) activities provide a strong signal of management integrity, the involvement of the client in irresponsible CSR should alert the auditor to the risk of material misstatement. Framing management integrity assessments by relying on responsible CSR activities can lead to auditors' unintended alignment with their clients' preferred outcomes. Motivated by the
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Audit market concentration, legal regime, and audit fees: An international investigation International Journal of Auditing (IF 2.345) Pub Date : 2023-07-19 Eugenia Y. Lee, Jong-Hag Choi, Eunhee Kim, Hee-Yeon Sunwoo
Despite regulators' on-going concerns on the high concentration of the current audit market, the effects of concentration on auditors' behavior is still debated. We provide an answer to this unresolved issue by considering the role of legal regime in shaping auditors' pricing strategy in a concentrated market. Using data from 33 countries, we find no significant association between audit market concentration
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Quo vadis, internal auditing? A vision for internal auditing in 2030 International Journal of Auditing (IF 2.345) Pub Date : 2023-06-22 Annukka Jokipii, Antti Rautiainen
We aim to respond to calls in internal auditing (IA) literature and to the current changes in the IA field by describing the driving forces and vision of the future for IA in the year 2030. [Correction added on 24 August 2023, after first online publication: The definition of IA in the preceding sentence has been corrected in this version.] The goal was to prompt in-depth discussion informed by the
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Managerial litigation risk and auditor choice International Journal of Auditing (IF 2.345) Pub Date : 2023-06-14 Leye Li, Gary S. Monroe, Jeff Coulton
Our study investigates the causal relationship between managerial litigation risk and auditor choice decisions. Exploiting the staggered adoption of universal demand (UD) laws at the state level in the United States, we use a stacked regression approach and find a lower propensity for affected firms to switch to higher-quality auditors after the exogenous reduction of managerial litigation risk. This
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Engagement partner identification format and audit quality International Journal of Auditing (IF 2.345) Pub Date : 2023-06-08 Jean Bédard, Carl Brousseau, Louis-Philippe Sirois
Exploiting the staggered adoption of three key regulations that implemented distinct engagement partner identification (EPI) formats for separate groups of Canadian firms over a 10-year period, we investigate the association between eight audit quality proxies and three EPI formats: two indirect (auditor permit number in the report, Form AP) and one direct (partner name in the report). This unique
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Compromising your morals: The perils of new beginnings as an auditor International Journal of Auditing (IF 2.345) Pub Date : 2023-06-06 Robert Rankin, Trish Driskill, Caroline Hartmann, Jacqui Cassle
This real-world inspired case describes an ethical dilemma for a recently hired auditor and new Certified Public Accountant (CPA)/Associate Chartered Accountant (ACA) who must choose between cheating on a mandatory firm audit training and exam and suffering the possibility of negatively affecting her advancement with the firm and future compensation. The purpose of this case is to provide students
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CEO locality and audit fees International Journal of Auditing (IF 2.345) Pub Date : 2023-04-26 Batjargal Bolor-Erdene, Keumah Jung, Woo-Jong Lee, Sohee Park, Hee-Yeon Sunwoo
Recent literature suggests that compared to non-local CEOs, local CEOs care more about reputation capital and hence exhibit a longer-term orientation. Building on this literature, we address the audit pricing of CEO locality. Our empirical analyses reveal that audit fees for firms with local CEOs are lower than those for firms without local CEOs, suggesting a lower audit risk associated with local
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Relational contracting theory and internal audit: Chief audit executives' perspectives on creating and strengthening trust by building credibility and clarity International Journal of Auditing (IF 2.345) Pub Date : 2023-04-26 Elnaz Vafaei, Hajinder Singh, Glennda Scully, David Gilchrist, Prerana Agrawal
Using the lens of relational contracting, we examine internal auditors' efforts in building a relationship of trust with management within the context of operational audits. We gain insights into the day-to-day practices of internal auditors by interviewing 28 chief audit executives of internal audit departments across Australia and find that internal auditors undertake numerous measures to demonstrate
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Issue Information International Journal of Auditing (IF 2.345) Pub Date : 2023-04-05
No abstract is available for this article.
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Auditor choice in the voluntary sector: The case of smaller organizations International Journal of Auditing (IF 2.345) Pub Date : 2023-04-04 Ellen M. Kulset, Charlotte Haugland Sundkvist
Smaller organizations are less likely than larger organizations to engage a high-quality auditor to signal credibility to potential donors, but they may still have incentives to engage a high-quality auditor (for instance, to protect themselves from a potential reputational loss). In this context, we find that fundraising voluntary organizations, which are particularly likely to be exposed to reputational
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Are abnormal audit fees informative about audit quality? The moderating role of office resource availability International Journal of Auditing (IF 2.345) Pub Date : 2023-04-02 Gopal V. Krishnan, Paul Tanyi
We contribute to the literature on the relation between client-level abnormal (excess) audit fees and audit quality by offering a novel perspective. We posit that audit office-level resource availability moderates the relation between client-level audit fees and audit quality. This is because office-level resources (audit partners, staff, technology and administrative support) are generally shared
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Determinants and quality of audits and reviews of small charities financial statements International Journal of Auditing (IF 2.345) Pub Date : 2023-03-28 Yitang (Jenny) Yang, Roger Simnett
Using a random sample of 500 Australian small charities, we first identified the determinants for the 56 charities disclosing audit/review reports (53 audits and three reviews) from the 110 voluntarily lodging annual reports. Sequential logistic regression showed that lodging charities are larger, rely more on government grants and use accrual accounting, while factors explaining the disclosure of
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The role of auditors and banks in the tax aggressiveness of private firms International Journal of Auditing (IF 2.345) Pub Date : 2023-03-23 Markus Mättö, Mervi Niskanen, Hannu Ojala
This study examines the role of auditors and monitoring banks in the tax aggressiveness of private firms. We use a unique data set of private small and medium-sized entities (SMEs) in Finland where book–tax alignment is high and the auditing of private firms (exceeding a low threshold) is mandatory. We add to the existing literature by investigating the auditing of small private firms and using more
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The impact of changes to auditors' reporting and audit committee strength on bank directors' perceptions and decisions: An experimental investigation International Journal of Auditing (IF 2.345) Pub Date : 2023-03-19 Michelle Höfmann, Christiane Pott, Reiner Quick
This study investigates the impact of two changes to the auditor's report—a separate section addressing going concern uncertainties (GCU section [GCUsec]) and information on management and auditor responsibilities—and the characteristics of the audit committee on bank directors' perceptions and decisions. In a 2 × 2 × 2 between-subjects experimental design with 85 German bank directors, we observe
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Service performance assurance for small charities: Experiences from New Zealand International Journal of Auditing (IF 2.345) Pub Date : 2023-03-12 Gina Xu, Cherrie Yang
Small charities in New Zealand are leading the way in service performance reporting and assurance, providing a unique context for exploring the existing practices and challenges. This study investigates small charities' assurance practices based on a content analysis of the performance reports of 120 small registered charities. We found that many small charities have complied with the assurance and
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Impact of remote audit on audit quality, audit efficiency, and auditors' job satisfaction International Journal of Auditing (IF 2.345) Pub Date : 2023-02-03 Yueqi Li, Sanjay Goel, Kevin Williams
The audit profession has experienced a digital transformation over the last decade with a rapid shift towards remote auditing forced by the recent COVID pandemic. This shift has led to changes related to the way auditors work and perceive. Through a survey of external auditors, this study addresses how the changes from on-site audits to remote audits affect audit success (i.e., audit quality, audit
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Determinants and consequences of auditor switching during fiscal year-end audit fieldwork International Journal of Auditing (IF 2.345) Pub Date : 2023-01-22 Bum-Joon Kim, Vivek Mande, Myungsoo Son
We compare a group of firms switching auditors while their annual audit is underway (LateSwitches) with two control groups: firms switching their auditors during the fourth quarter of the fiscal year and firms switching their auditors during the first three quarters. First, we find that LateSwitches tend to be riskier with regard to litigation risk, audit risk and business risk. Second, we find that
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Seasonal affective disorder and audit quality International Journal of Auditing (IF 2.345) Pub Date : 2023-01-22 Rachana Kalelkar, Qiao Xu, Lele Chen
This paper investigates whether seasonal affective disorder (SAD) influences audit quality. On the one hand, a SAD-induced negative mood can render auditors risk-averse in auditing. On the other hand, SAD can lower their cognitive ability and efficiency at work. Our results show that absolute discretionary accruals and the likelihood of restatements are lower when the level of SAD is higher during
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Issue Information International Journal of Auditing (IF 2.345) Pub Date : 2023-01-04
No abstract is available for this article.
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How do investors perceive audit report lag? Evidence from the cost of equity International Journal of Auditing (IF 2.345) Pub Date : 2023-01-04 Rachana Kalelkar, Qiao Xu
We investigate how investors perceive audit report lag. We argue that the cost of equity will be lower (higher) if a long audit report lag links positively to confidence (scepticism) among investors about the credibility of reported earnings. We find that the audit report lag is positively associated with the cost of equity. In the additional analyses, we report that the audit committee's effective
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Audit fee determinants in small municipalities: Further evidence from Connecticut small towns International Journal of Auditing (IF 2.345) Pub Date : 2023-01-04 Jacqueline T. Jamsheed, Joseph T. Patton, Marc B. Lewis
Guided by a call for research on small entities using innovative methodologies, this study is the first to analyse small municipality audit fees on a per capita basis. The research utilises a complete dataset of all 92 Connecticut municipalities that meet the study criteria and does not rely on samples or survey results. The measure of per capita was utilised to account for differences between town
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Abolition of mandated joint-audit requirements: Impact on audit reporting lag in an emerging capital market International Journal of Auditing (IF 2.345) Pub Date : 2022-12-28 J.-L. W. Mitchell Van der Zahn
The study aims to examine how changes in the Kuwait audit market following abolition of mandated joint-audit requirements impact audit reporting lag. Analysis tests whether joint-/solo-audit switches (following abolition mandated requirements) affected the level and change in audit reporting lag. The study also tests if the joint-audit pair combination is a decisive factor in determining the (a) level
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An exploratory study of the perceptions of auditors on the impact on Blockchain technology in the United Arab Emirates International Journal of Auditing (IF 2.345) Pub Date : 2022-11-27 Abdollah Mohammad Parmoodeh, Esinath Ndiweni, Yasser Barghathi
The purpose of this paper is to explore the prospects of blockchain technology (BCT) on audit practice. Semi-structured interviews were conducted with practitioners from the Big Four and non-Big Four firms; their responses were analysed thematically. The findings are significant regarding the three main themes identified: namely, audit practice, procedures and the challenges associated with the adoption
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Auditor-provided non-audit services and perceived audit quality: Evidence from the cost of equity and debt capital International Journal of Auditing (IF 2.345) Pub Date : 2022-11-21 Christian Friedrich, Reiner Quick, Florian Schmidt
There is an ongoing debate among regulators and researchers about concerns that the provision of non-audit services (NAS) to audit clients may impair audit quality by reduced independence. In this context, there can be different perspectives on audit quality. Given recent regulatory changes in the European Union (EU) aimed to improve investor confidence in audited financial statements, it is critical
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Government contracts and audit fees International Journal of Auditing (IF 2.345) Pub Date : 2022-11-16 Mai Dao, Trung Pham, Hongkang Xu
Topics concerning government contracts have recently attracted much attention from researchers and the public because of the US government's significant spending on goods and services. In this study, we investigate whether audit fees are associated with audit clients' government contracts. We find that firms with a higher proportion of government sales to total sales pay higher audit fees than other
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Issue Information International Journal of Auditing (IF 2.345) Pub Date : 2022-10-02
No abstract is available for this article.
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The role of audit styles in financial statement comparability: South African evidence International Journal of Auditing (IF 2.345) Pub Date : 2022-09-07 Christelle Smith
This study investigates the role of audit styles at different levels on financial statement comparability in South Africa, a setting where firms report under International Financial Reporting Standards (IFRS), the institutional environment is strong and the audit environment is dominated by the Big 4 audit firms. An output-based comparability measure is used to consider the association between audit
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Effects of regulatory enforcement style and audit firm remedial actions on investors' perceptions of audit quality International Journal of Auditing (IF 2.345) Pub Date : 2022-09-04 Xiaowen Huang, John C. W. Ko, Soon-Yeow Phang
We examine how investors perceive audit quality when regulators adopt different enforcement styles to communicate audit inspection findings, and when the audit firm responds to the inspection findings. We employed a 2 × 3 between-subjects experimental design, with regulatory enforcement style (critical or supportive) and audit firm response (defensive actions or remedial actions or control) as the
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Do auditors account for firm-level political risk? International Journal of Auditing (IF 2.345) Pub Date : 2022-08-23 Mahmud Hossain, Santanu Mitra
We examine whether firm-level political risk influences auditor behaviour. Using a text-based political risk measure, we find that firms subject to higher levels of political risk face longer audit report lags, are more likely to have going-concern opinions issued by their auditors and pay higher audit fees. However, the effect of political risk on audit outcomes becomes moderated in the presence of
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Does human resource investment in internal controls and information technology improve audit efficiency? International Journal of Auditing (IF 2.345) Pub Date : 2022-08-17 Hyejeong Shin, Sorah Park
This study examines the effect of client human resource investment in internal controls (ICs) and information technology (IT) on audit efficiency. Accordingly, we propose a novel approach to modify the measurement of audit efficiency by directly measuring the length of time from the fiscal year end to the last day of fieldwork of an audit firm—fieldwork lags (FWLs)—rather than audit report lags (ARLs)
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A taxing audit—On the association between auditor workload compression and tax avoidance International Journal of Auditing (IF 2.345) Pub Date : 2022-08-03 Dennis M. Lopez, S. Mark Greenwald
This study investigates the association between auditor workload compression and tax avoidance. Heavy auditor workloads can limit the extent to which auditors are able to examine the determination of the income tax provision, creating opportunities for companies to maintain their tax avoidance strategies unimpeded. We find evidence indicating that audits performed by auditors with greater levels of
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Market reactions to the appointment of audit committee directors with financial and industry expertise in Germany International Journal of Auditing (IF 2.345) Pub Date : 2022-07-28 Sascha Kieback, Martin Thomsen, Christoph Watrin
Several calls from practitioners and the relevant literature suggest that audit committee directors with industry expertise complement the knowledge of financial experts. Thus, this study examines market reactions to the voluntary appointment of new audit committee directors with financial and industry expertise in Germany. Using hand-collected German data on newly appointed audit committee director
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Media coverage of corporate social irresponsibility and audit fees: International evidence International Journal of Auditing (IF 2.345) Pub Date : 2022-07-25 Tracie Frost, Liwei Shan, Albert Tsang, Miao Yu
This study uses a large sample of firms from 35 countries to examine how media coverage of corporate social irresponsibility (CSI) affects audit fees. We document a positive and significant relationship between media coverage of CSI and audit fees. Further evidence indicates that this positive relationship is less pronounced for firms with a higher level of commitment to corporate social responsibility
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Banks' voluntary disclosure in the audit committee reports, cost of equity and the mediating role of financial analysts International Journal of Auditing (IF 2.345) Pub Date : 2022-07-15 Najib Sahyoun, Michel Magnan
Voluntary disclosure in the audit committee report is expected to provide additional information about the activities undertaken to protect investors. The Securities and Exchange Commission's (SEC) ultimate aim in initially promulgating audit committee disclosure requirements was to reduce firms' cost of equity. However, prior research finds that voluntary disclosure in the audit committee report is
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Issue Information International Journal of Auditing (IF 2.345) Pub Date : 2022-07-03
No abstract is available for this article.
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Auditor's responses to changes in risk International Journal of Auditing (IF 2.345) Pub Date : 2022-07-03 Michael E. Bradbury, Tom Scott
This paper examines whether auditors plan engagements to be the same-as-last-year (SALY) and if they respond to changes in risk both before and during audit engagements by varying engagements from planned. These are important questions considering audit standards require the assessment of risk and general concerns about audit quality and fee pressure. We provide new insights using a proprietary database
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Corporate reputation and stakeholder engagement: Do assurance quality and assurer attributes matter? International Journal of Auditing (IF 2.345) Pub Date : 2022-06-16 Isabel-María García-Sánchez, Nicola Raimo, María-Victoria Uribe-Bohorquez, Filippo Vitolla
The objective of this research is to determine the impact that sustainability assurance services have on corporate reputation and stakeholder engagement, delving into the differentiating effect of certain attributes of the assurer and the quality level of the assurance. After an initial exploratory analysis in which the added value that the assurance service has on the external business image and on
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Auditors' workload and audit quality under audit hour budget pressure: Evidence from the Korean audit market International Journal of Auditing (IF 2.345) Pub Date : 2022-06-12 Seokyoun Hwang, Philip Keejae Hong
By utilizing unique audit hour (actual and budgeted) data from Korea, this study examines the impact of auditors' workload on audit quality under audit hour budget pressure. We find the intensity of auditor workload has a negative impact on audit quality when total audit hours exceed budgeted hours (i.e., unfavourable budget variance). When we breakdown the audit workload by auditor level, we find
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The homogeneity of BIG4 audit reports after the implementation of key audit matters in the context of fair value accounting International Journal of Auditing (IF 2.345) Pub Date : 2022-05-27 Tuomas Honkamäki, Markus Mättö, Henri Teittinen
This study examines the homogeneity of BIG4 audit reports after implementing key audit matters (KAMs) in the context of fair value accounting. We focus on reported KAMs and the procedures related to the fair values of investment properties, particularly those related to challenging management's estimations and valuation specialists' use. Our data consist of 235 individual audit reports from the real
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What does an audit really cost? An exploratory study of auditor pricing of initial engagements in a fixed cost model International Journal of Auditing (IF 2.345) Pub Date : 2022-05-13 Christie Novak, W. Robert Knechel
Despite decades of research on audit fees, we know very little about the cost to produce an audit. In this paper, we discuss the nature of fixed and variable costs in the audit process. We then use this cost perspective to examine the debate about the pricing of initial audit engagements, an event where marginal costs and marginal revenues are likely to diverge. This is often referred to as ‘lowballing’
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Internal audit: A case study of impact and quality of an internal control audit International Journal of Auditing (IF 2.345) Pub Date : 2022-05-12 Leif Christensen
Traditionally, when companies needed assistance regarding internal controls, they turned to an external auditor (EA). However, now, due to an ongoing tightening of legal requirements and practices regarding the independence of EAs, this assistance has been restricted. As an alternative, companies are increasingly requesting internal audits to deliver this support. Even though internal audit function
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Issue Information International Journal of Auditing (IF 2.345) Pub Date : 2022-04-05
No abstract is available for this article.
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PCAOB international inspections: Updates and extensions International Journal of Auditing (IF 2.345) Pub Date : 2022-03-04 Philip Keejae Hong, David S. Kerr, Casper E. Wiggins
Based on data from 760 PCAOB inspection reports issued between December 2006 and April 2021 for 305 non-U.S. audit firms, this paper analyses changes and trends in PCAOB inspection traits, inspection outcomes, audit firm characteristics and firms' reactions to those inspections. We find significant changes have occurred in several areas, including changes in audit quality for both principal-auditor